Bharat Electronics Ltd (BEL) share price surges 3.26% to ₹169.35 per share on Friday, December 15, after the company bagged a mega defence order. The Ministry of Defence has entered into a significant agreement with BEL, Pune, for the acquisition of electronic fuzes for the Indian Army over a 10-year period, with a total investment of ₹5,336.25 crore. Aligned with the 'Aatmanirbhar Bharat' vision, this contract is established for the procurement of ammunition under the 'Manufacture of Ammunition for Indian Army by Indian Industry' initiative.
This government-led effort addresses the long-term 10-year demand for ammunition, as stated in a press release. The project's primary objectives include bolstering ammunition reserves to reduce dependence on imports, attaining self-sufficiency in ammunition production, acquiring crucial technologies, and safeguarding stocks in the face of disruptions in the supply chain. Brokerage firm UBS raised the target price to ₹205.
In line with their preference for state-owned defence enterprises, they remain bullish on Bharat Electronics’ (BEL) growth/returns, the firm said. Enhanced visibility in earnings growth and a growing order pipeline substantiated the premium valuation. Analysts elevated the target price to ₹205, acknowledging the potential for upgrades in new orders over the next three to five years, as well as in exports.
Electronic Fuzes play a pivotal role in medium- to heavy-caliber artillery guns, ensuring sustained artillery firepower during military operations. These Fuzes will be acquired for deployment in artillery guns capable of delivering lethal engagements across diverse terrains, including high-altitude areas along the Northern Borders. The production of Electronic
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